Does the high price of specialty coffee affect consumer behavior?
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Coffee prices are constantly fluctuating. The economic recession caused consumption demand to decline rapidly, the prices of all goods also fluctuated up and down. Although there have been ups and downs in each period, the price of specialty coffee has remained at a high level and there have been spikes despite the difficulties of the market. What are the causes? How does this affect consumer behavior? Will they accept such increasingly high prices to enjoy specialty coffee? Let’s find out with 43 Factory Coffee Roaster now!
The price of specialty coffee soars
Market situation of specialty coffee prices
In 2022, the price of Arabica coffee will reach $ 2 / pound or more, nearly doubling in the first months of the year. Rob Berghmans, founder of specialty coffee roaster Caffènation in Belgium and the Netherlands, also said he had to increase his coffee prices by an average of $3.82/kg.
The reason for the increase in the price of specialty coffee
This increase is mainly due to the lingering effects of the pandemic and the conflict in Ukraine. Social distancing and long-term conflict have disrupted global supply chains. This leads to difficulties in transportation, import and export, chaotic supply and demand, high inflation causing the prices of raw materials and energy to increase sharply. This increase causes the cost of coffee production and supply to be pushed up, causing the price of green coffee to increase sharply. The higher the daily import price, the higher the price of the finished cup of coffee also affects the business of businesses and consumers.
What did specialty coffee businesses do to control prices?
If the price of coffee is too high, consumers may limit spending on this item, directly affecting the profits of businesses. Therefore, they had to adjust the way of doing business to keep the cost down to the lowest level to keep the price at a reasonable level. Many businesses choose to increase the volume of coffee imports to get preferential prices and save on transportation costs. But this approach is only feasible for large enterprises with enough budget and high liquidity. So some roasters and other suppliers have diversified their portfolios to balance profits. They offer a wide range of coffees from premium to affordable varieties. Design price brackets, promote marketing campaigns to both increase customer experience and offset losses of premium coffee batches.
However, these methods are not viable in the long term. With the current market pressure, businesses still need to raise prices to maintain and survive. Consumers need to understand the increase in coffee prices because of costs and the general situation of the market in order to understand and share the burden for coffee producers and suppliers.
Does rising coffee prices affect consumer behavior?
This is a question that perhaps every roaster or specialty coffee shop is interested in. As we can see, any price increase will lead to a change in customer behavior. Faced with the fact that the price of specialty coffee increases, consumers’ attitudes and behaviors are divided into two types.
As prices rise, consumers tend to take a closer look at their value. Even if the reason for the price increase is clearly communicated, you will still have concerns or even refuse to pay for items when the price is too high. Especially in a time when people are tending to save, the high coffee price will more or less affect consumer behavior. They will probably limit consumption of this item during price increases.
Still keeping consumption
However, in some other countries, although the price of a cup of coffee has continuously increased in recent months, coffee consumption has not slowed down. For example, in the most recent National Coffee Data Trends report, the National Coffee Association found that coffee remains the most consumed beverage in the United States. Scott Tedder, principal roaster and green coffee buyer at Bonanza Coffee in Germany, also says that for many people in some countries, coffee is a staple, so adding a few cents per cup doesn’t hurt. much to them. Besides, the price of coffee increases with other products, so they are easy to accept and pay.
What should businesses do to retain customers when the price of specialty coffee increases?
To answer this question, businesses need to put themselves in the situation to understand the concerns of their customers. Here are some methods that businesses can refer to:
– Transparent pricing from Paid for Farmer, POB, DDP,…. so that customers can understand why costs increase.
– Improve service quality and experience to make customers more satisfied
– Select shipping methods, optimize the cost of packaging, materials to reduce costs,…
It can be seen that with the current price, there are still a large number of fans willing to pay to experience delicious cups of coffee. However, if this uptrend continues and outpaces other price rallies in major consumer markets, things could change. Follow 43 Factory Coffee Roaster to stay up to date with the fluctuations of this specialty coffee!